In the new issue of Regulation, economist Pierre Lemieux argues that the recent oil price decline is at least partly the result of increased supply from the extraction of shale oil. The increased supply allows the economy to produce more goods, which benefits some people, if not all of them. Thus, contrary to some commentary in the press, cheaper oil prices cannot harm the economy as a whole.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Archives: 06/2008

For those of you not in the cultural “know,” Sim-City is a long-standing series of computer games which asks the player to essentially play the role of a Stalinist super-planner. What to build, where to build, and how people are to relate to all those buildings in your custom-designed city is up to you, the all-knowing, all-powerful uber-planner.

It’s all good fun in the privacy of your own home (I guess), but is this the sort of game we want the next President to play? I’m going to go out on a limb and say no. John McCain, however, seems to disagree.

Consider, for instance, John McCain’s call earlier this week for the United States to build 45 new nuclear power plants by 2030 and another 55 sometime after that. The first question that comes to mind is, why 45? Did the McCain brain trust engage in some high level economic computer modeling to discover that the optimum number of new nuclear power plants is not 42, 47, or some other number … but the nice, round number of 45? I’m going to guess that they did not. I’m going to surrender to my cynical alter-ego and posit that, if one were to ask the question, “Sen. McCain, how exactly did you come to the determination that the economically optimal number of new nuclear power plants is 45 new facilities over the next 22 years?” the answer you would get would likely be totally incomprehensible.

There are two ways we can go on energy policy. We can leave the decisions about what to build and when to build to market actors (disciplined as they are by hard costs and incentivized as they are by the pursuit of profit), or we can leave that task to political uber-planners who are not disciplined by either but are disciplined by campaign contributions, polling data, and periodic popularity contests. Call me a crazy ideologue, but I suspect that the economy would prove more efficient with the former rather than the latter approach.

Note: The reason we hear politicians like John McCain talk so much about the need for the federal government to promote nuclear power is because investors in the private sector take one look at the economics and run screaming for the hills. Investment banks tell utilities who want to borrow money to build these things that not one red cent will be coming their way unless and until the federal taxpayer guarrantees that the entire loan will be repaid in case of default. If nuclear power were such a good economic bet, those taxpayer guarantees would not be necessary.

Your editorial lauds the Massachusetts health care reforms as “off to a good start” and “heartening.” The editorial addresses the reforms’ higher-than-projected costs thus:

“The shortfall occurred mostly because the state underestimated the number of uninsured residents and how fast low-income people would sign up for subsidized coverage. It is a warning to other states to keep projections realistic.”

I’m sorry, but if states can low-ball the cost of reforms to get them enacted, and still get praised by the paper of record, that’s exactly what they’ll do. Some “warning.”

The federal voucher program that enables nearly 2,000 children in the District of Columbia to attend private schools is facing opposition in the Democratic Congress and may be discontinued. Some people just can’t stand to think that kids might get educated outside the grasp of the government.

The most honest, decent, and thoughtful Democratic president of modern times, Jed Bartlet, was surprised to find himself supporting vouchers on an episode of NBC’s “The West Wing.” Bartlet’s staff summoned the mayor of Washington, D.C., to the White House to plot strategy for his veto of a Republican-backed bill to provide vouchers for a few students in D.C. schools–and was stunned to discover that the mayor and the D.C. school board president both supported the program, as indeed Mayor Anthony Williams and School Board President Peggy Cooper Cafritz did in real life. Why? the president asked the mayor. “After six years of us promising to make schools better next year,” the mayor replied, “we’re ready to give vouchers a try….We spend over $13,000 per student–that’s more than anywhere else in the country-and we don’t have a lot to show for it.” (As Andrew Coulson wrote recently in the Washington Post, the real cost is actually much higher than that.)

Then the president summons his young personal aide to testify to the merits of D.C. public schools and gets another surprise:

Faced with the evidence, President Bartlet decided to do the right thing. Will Congress?

In a recent “Best of the Web” column, the WSJ’s James Taranto uncharacteristically ventures into the world of education policy. Suburban conservatives, he notes, often oppose school choice because they fear the impact of choice programs on their property values and their own children’s schools. “A voucher program,” he adds, “offers little to those who already have choice.”

Taranto, as always an astute political observer, is right that this perceived self-interest on the part of suburbanites is a serious hurdle for school choice advocates. Where he goes astray is in assuming that the perception is correct.

According to Taranto, parents who are wealthy enough to pick from among existing public school districts and private schools “already have” everything that a free educational marketplace could possibly offer them. That’s like saying upscale Soviet apparatchiks already enjoyed the benefits of capitalism because they could choose between a Lada and Yugo. The system of schools we have today is not a free market system. We have a legally protected 90 percent state monopoly school system with a small niche of non-profit schools mostly serving the religious education market due to the “free” government schools’ inability to serve that niche. This hobbled and distorted system no more captures the full panoply of options a true market would provide than the Yugo and Lada represented the full range of vehicle options in the capitalist West. Furthermore, no existing U.S. school choice program comes close to creating a genuine free market in education, as economist John Merrifield pointed out in a recent Cato Policy Analysis (“Dismal Science: The Shortcomings of U.S. School Choice Research and How to Address Them”).

Getting Americans to realize what they’re currently missing is indeed going to be a tough hurdle for school choice advocates. But it’s a hurdle that can be overcome.

As for the impact of school choice on property values, Taranto is right that there would likely be an important effect, but it is more subtle than he imagines, and there are countervailing forces he ignores. It is more subtle because property values and school district quality are not perfectly correlated. Some desirable places to live have better schools than others, and most homeowners do not currently have children in school. In otherwise desirable areas with mediocre or relatively poor schools, property values would go up, just as they would likely fall in expensive districts with relatively better schools. So, for some suburban homeowners the property value effect would be negative, while for others it would be positive. More importantly, well-designed market education reforms will generate very substantial state and local tax savings, year after year, because the current monopoly system is ridiculously expensive. Cato is about to release a study of the fiscal impact of a large-scale education tax credit plan, and it would save taxpayers billions of dollars in all five states analyzed. A one-time hit in property values may not seem so grim a prospect when offset by this falling tax burden. Most people own their homes for many years, and so would have plenty of time to reap tax savings.

Finally, the idea that a competitive education marketplace would lead to a mass migration of urban children into suburban schools is highly unlikely. Urban parents want the same things as suburban ones: good schools in their own neighborhoods. Urbanites do not commute to suburbia to go to Barnes and Noble or Starbucks. There are already good bookstores and coffee shops in our nation’s cities (in fact, there are good coffee shops in good bookstores in our major cities). Supply rises to meet demand in education as in every free marketplace. Once all families have the financial resources to easily choose schools, more and better private educational options will emerge in cities – just as has been the case with even the tiny Milwaukee voucher program. Most urban families will prefer good local schools to good schools in remote suburbs that would require long bus rides for their children.

This might be a shocker to many, but Barack Obama has admitted that he’s a politician after all. After calling NAFTA “a big mistake” and “devastating” just 2 months ago, the presumptive Democratic nominee now thinks that the trade agreement is not that bad.

He justifies this U-turn saying that “Politicians are always guilty of [overheated and amplified rhetoric], and I don’t exempt myself.” This is coming from someone who, on the campaign trail, has attacked those who would say anything to get elected.

I pulled the September 24, 2007, copy of the New Republic out from a stack on my coffee table last night and happened on a fascinating column about the upcoming primaries. John Judis laid out in convincing detail just why the primary race was likely to go all the way to June and maybe even to the convention. He did acknowledge that people had made such predictions before:

Of course, dire prognostications of brokered conventions are made nearly every election…. But the structure of the election has changed this year. The old schedule of primaries and caucuses was designed to winnow the field. Invariably, only two candidates were left standing by March, one of whom would eventually capture enough delegates through the remaining contests to win the nomination. By contrast, the 2008 schedule concentrates more than half of the primary and caucus votes in the first month, which ends February 5. If there is no clear frontrunner by then, the race will probably continue on into June and perhaps even up until the convention.

And that’s why, he said, the delegates just might find themselves choosing the nominee at their convention in Minneapolis.

Yes, Minneapolis. Not Denver. The Republican convention. Because, Judis said, it was likely that Rudy Giuliani, Mitt Romney, and Fred Thompson would divide the states on a regional basis and no one would get a majority of the delegates. “So there is a very good chance that, by June, none of the Republican candidates will have secured the nomination.”

And then what would happen? Well, “the struggle for the nomination would probably move to the GOP convention’s rules committee,” which would have to decide, among other things, whether to disqualify delegates from Florida and other states that held their primaries too early.

TNR readers might have been worrying, Could this happen to our party? Not to worry, said Judis:

Democrats seem far less likely to face this sort of challenge next year. Indeed, Hillary Clinton appears to be putting her competition behind her, and none of her challengers has a built-in regional advantage that will ensure a respectable block of delegates….In fact, the compressed primary schedule could make a stalemate less rather than more likely for Democrats….While Republicans become ever more fractious as the general election approaches, Democrats will have already spent months coalescing around a new leader.

In this I think Judis was doubly, or triply, wrong. Not only did he get the primary process completely wrong in each party, I think he was wrong to predict that a drawn-out nominating process would be bad for the party. It seems clear today that Barack Obama has greatly benefited from the long battle with Hillary Clinton: he held the nation’s attention longer, he became a sharper debater, he raised unprecedented sums of money, he built an organization in every state, he faced a lot of the revelations and charges that would otherwise have come up closer to the election.

John Yoo published this article in the Wall Street Journal yesterday about the Supreme Court’s Boumediene ruling. He makes too many claims for me to respond to here in a blog post, but let me address a handful.

1. Yoo: “Under the writ of habeas corpus, Americans (and aliens on our territory) can challenge the legality of their detentions before a federal judge.”

This is an astonishing statement coming from a former Department of Justice official like John Yoo. I say that because Americans were locked up in military brigs as “enemy combatants.” And their attorneys did file habeas corpus petitions in federal court. The Bush administration responded to those petitions by urging the federal courts to immediately throw them out of court! At one point in the litigation, Bush’s lawyers told the Supreme Court, “The Commander in Chief … has authority to seize and detain enemy combatants wherever found, including within the borders of the United States.” Brief for United States, Rumsfeld v. Padilla (No. 03-1027), p. 38. Yoo and others now seem to be playing down those previous assertions about the executive’s military powers, but the record is there for anyone to check. Bush’s lawyers argued that such American prisoners were perfectly free to “challenge” their imprisonment by filing a habeas corpus petition–again, just so long as the courts pronounced such petitions dead on arrival. See Hamdi v. Rumsfeld, 296 F.3d 278, 283 (2002) (“The government [argues that the courts] may not review at all its designation of an American citizen as an enemy combatant–that its determination on this score are the first and final word.”).

With that background in mind, let’s return to Yoo’s claim that Americans “can challenge the legality of their detentions before a federal judge.” To be non-misleading, one would have to add something like, “as long as the courts repudiate the Bush administration’s claims regarding executive power.” Or I suppose there is another possibility. One could prop up the claim with a clarification like “After all, any lawyer can try to challenge anything.” A lawyer can challenge a speeding ticket by the Colorado State Police by asking a judge in Maine to rule in his favor. The Maine judge isn’t going to take any action because his court has no jurisdiction, but the lawyer is nevertheless free to file his request or “challenge” in Maine, futile as it is.

In context, Yoo seems to be trying to assure readers that the writ of habeas corpus is in place for Americans. Well, only if you ignore the legal precedents the Bush administration has been trying to establish. Or only if you are assured by the fact that Americans have a guaranteed right to file futile legal motions in court.

2. Yoo: “The Boumediene Five also ignored the Constitution’s structure, which grants all war decisions to the president and Congress.”

All war decisions? Should the Supreme Court have sanctioned Harry Truman’s seizure of the steel mills (Youngstown Sheet and Tube v. Sawyer, 343 U.S. 579 (1952))? Should the Supreme Court have sanctioned the internment of Americans during World War II (Korematsu v. United States, 323 U.S. 214 (1944)? Should the Supreme Court have affirmed the conviction of Eugene Debs under the Espionage Act for giving an anti-war speech (Debs v. United States, 249 U.S. 211 (1919)? Should the Supreme Court have sanctioned military trials for Americans during the Civil War (Ex Parte Milligan, 71 U.S. 2 (1866)? Perhaps Yoo answers all of these questions in the affirmative, but shouldn’t he make his case for such sweeping war powers more forthrightly?

3. Yoo: “Under Boumediene’s claim of judicial supremacy, it is only a hop, skip and a jump from judges second-guessing whether someone is an enemy to second-guessing whether a soldier should have aimed and fired at him.”

Here Yoo wants readers to imagine a judge in robes running between foxholes to review the battle plan. He desperately wants readers of the Wall Street Journal to ask: What in the world can our Supreme Court be thinking? Not to worry. Yoo is simply trying to caricature a position with which he disagrees. I would make two points here. First, I quite agree that judges have no place on the battlefield. However, we need to watch our terms and definitions here. I do reject the Bush administration’s claim that all of the world, including all of the USA is a “battlefield.”

Second, once the dust has settled after a patrol or firefight, is it not appropriate to review the actions of our soldiers? Unless one is prepared to argue that U.S. military personnel are simply incapable of using their weapons unlawfully, war crime allegations have to be adjudicated somewhere, right? In a previously published article, Yoo has called the Abu Ghraib abuses “sadistic.” Given that statement, it seems fair to ask whether the prosecutions and convictions arising from that case were improper because a court “second-guessed” the soldiers’ detention and interrogation methods? And should not U.S. military personnel who believe they have been unfairly prosecuted be able to pursue their legal appeals (in the event of a conviction) beyond the military system to the Supreme Court? If not, why not?

For more on the Boumediene case, go here. For more on the Bush administration’s legal record, go here. For more on John Yoo, go here.